County bottom line shows rebound over prior year
Despite numerous body blows to the Nevada County budget the previous year, largely owing to the pandemic and ancillary events associated with COVID-19, the county has bolted upright and beat back many of the financial bruises.
The projected revenues for fiscal year 2021-22 tallied up to $297.2 million. However, expenses totaled nearly $300 million, said Martin Polt, the county’s chief fiscal officer. However, he added that the coming year’s budget is a substantial improvement over fiscal year 2020-21, which ends June 30.
For fiscal year 2020-21, projected revenues are $251.1 million while expenses were $266 million, leaving a $15 million deficit. But because of the strain COVID-19 placed on the economy, forecasters anticipated a $12 million reduction in revenue that never materialized. Despite that, it will be difficult to precisely pinpoint the actual dollar amount by June 30. This is partly because significant revenues owed to the county due June 30 are not expected to arrive until August, Polt said.
The Board of Supervisors at a special Tuesday meeting unanimously approved a projected budget. A final vote of the board is expected June 15.
“This is a moderately healthy year,” said Polt. “We can’t really change anything, since no supervisors recommended changes, so the projected budget will come in exactly as the adopted one.”
One aspect that will likely improve the budget picture is the fact the county does not budget for staff vacancies. It is expected a certain number of county employee will decide to retire this year, some will transition to new careers and still others may relocate closer to family, out of county. The county will not hold vacancies open just for the sake of the economy, said Polt. But to fill any open position, it can require a minimum of two to three months. Meanwhile significant savings can accrue.
REVENUE AND EXPENSES
Currently the county has 801 employees, though it’s budgeted for 806.
“We’ll make up some of the $3 million through attrition,” said Polt. “And in the Behavioral Health Department we maintain a 72-hour hold facility to prevent some psychiatric cases from causing harm to themselves or others, but we contract for more facilities than we need, so we can expect some savings there as well.”
While COVID-19 caused expenses to shoot up, it simultaneously reduced revenues, Polt said. In 2011 the federal government ordered a realignment of the number of inmates in state prisons because of overcrowding. That required the transfer of state and, more recently, federal inmates to county jails and some county inmates were placed on parole as a result. Yet it cut way back on county revenues housing state and federal inmates, about $1 million’s worth.
“To comply with COVID social distancing we told the federal government we could not fill the jails to capacity,” said Polt. “We also lost another $1 million from lost gas taxes when people stopped driving as often.”
The county also saved money when it closed juvenile hall during the pandemic. Typically holding six or more juveniles, the population sunk to just two, who were transferred to a recently built facility in Placer County. Polt attributes that mostly to the success of the Probation Department’s re-integration of violators back into the community, and behavioral health staff who worked in tandem with probation.
Other aspects hampered county expenses. Because of COVID-19, some homeless people were placed in non-congregate housing, mostly hotels, again to comply with pandemic protocols. The Federal Emergency Management Agency helped with that cost.
Additional assistance came from the federal government, including $10 million for the Coronavirus Aid Relief and Security Act, as well as $19.3 million for the American Recovery and Reinvestment Act. Also, the Paycheck Protection Program was backed by the U. S. Small Business Administration.
“Our local restaurants and retailers applied and received needed funding,” Polt said.
The county has now distributed 30% of CARES and ARRA funds. Also, the Realignment Act provided $21 million in state funds for various services to residents.
“In the unincorporated parts of Nevada County we don’t have so many economically sensitive businesses,” said Polt. “Instead, there’s more construction contractors and building supply businesses. There’s been a wave of home improvement projects. And, two years ago, the federal government passed an online sales tax. Online is now a driver of sales tax revenue.”
While the county deficit would be a substantial burden for an individual, it is 1% of the $300 million in business the county produces, Polt said.
While he cannot predict with certainty, he remains moderately upbeat regarding the local economy.
“A lot of things change throughout the year.” added Polt. “We have come in under budget many times.”
William Roller is a staff writer with The Union. He can be reached at firstname.lastname@example.org
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Given the job loss associated with the COVID-19 pandemic, nonprofits’ social services were greatly impacted.